Third Quarter Instrument Sales Exhibit Steady Growth

In the third quarter of 2007, revenues for IBO’s Laboratory Instrument Sales Index grew an impressive 13.7% to $4,218 million, identical to the second quarter’s revenue growth. Operating profit grew 21.8% to $693 million, and operating margin climbed 110 basis points to 16.4% of sales. Strong organic growth, acquisitions and favorable currency effects continued to positively impact revenue growth for companies such as QIAGEN, Luminex and Illumina, while other companies such as Bio-Rad Laboratories and Strategic Diagnostics were negatively affected. For the third quarter of 2007, 19 of the 22 companies in the Laboratory Instrument Sales Index reported earnings before this issue’s publication. For the other three companies (Oxford Instruments, Shimadzu and Tecan), modest growth rates are included. Bio-Rad Laboratories’ Life Science segment’s third quarter revenue grew 4.1%, or 1.2% on a currency-neutral basis, to $143.0 million (see page 12) due to increased demand for process chromatography, protein expression and immunoassay systems. Life Science sales would have improved 8% excluding BSE. Sales for BSE declined 20%. Sales to the US and Asia-Pacific remained strong, while sales to Japan weakened. Operating profits declined 17.5% to $5.2 million, but this was a substantial leap from second quarter operating earnings of $1.5 million. Favorable product mix and reduced operating costs drove operating profits sequentially higher. Third quarter sales for Harvard Bioscience improved 2.1%, including 4.1% from favorable currency transactions, to $19.4 million (see page 12). The Harvard Apparatus business unit reported strong sales in both the US and UK and weak sales in both Japan and France. Biochrom revenues benefited from sales of spectrophotometers and electrophoresis to customers other than GE Healthcare, including higher sales of plate readers outside of China. Despite increased costs from foreign operations due to the weak dollar, adjusted operating income climbed 6.6% to $2.4 million, while gross profit margins declined 153 basis points to 47.9% of sales. The company anticipates continued demand for spectrophotometers and estimates that fourth quarter revenues will grow 6%–10%. In addition, the company expects the acquisition of Panlab s.l. will further broaden the company’s distribution channels into other European markets and help augment revenue growth. Illumina’s quarterly revenues jumped 82.4% to $97.5 million, including product and service revenue growth of 91.9% and 14.3% to $90.0 million and $7.4 million, respectively. Consumables grew 61% to $52.7 million, driven by sales of custom array and genotyping chips, both up over 70%, while instrument sales jumped 206% to $34.1 million, led primarily by sales of BeadStation Systems and BeadXpress. The company has installed over 300 BeadStation systems and over 100 Genome Analyzer DNA sequencers as of September 30. Adjusted operating profits grew 7.3% to $16.4 million, excluding noncash stock compensation expenses. Because of the company’s strong stock performance, a large number of employees have cashed in their stock options, which negatively impacted operating profits by $8.7 million. Going forward, the company expects a decline in fourth quarter earnings due to higher costs and lower gross margins, but expects sales to reach $100–$104 million. Fiscal 2007 revenue guidance was increased for the second consecutive quarter to $354–$358 million from $335–$345 million, for growth of 92%–94%. In the third quarter, Invitrogen’s sales grew 10.8%, or 7.5% organically, to $315.0 million, primarily benefiting from greater sales volume, increased pricing and new product introductions. BioDiscovery sales climbed 10.5%, or 7.2% excluding favorable currency transactions, to $220.4 million, led by sales of Real Time PCR consumables, which grew over 25%, as well as sales of molecular cell biology products. Cell Culture Systems revenue improved 11.7%, or 8.3% excluding currency effects, to $94.6 million, driven by increased demand for production and specialty media products. Adjusted operating profits increased 25.5% to $68.2 million, excluding the impact of discontinued operations, while gross margins improved 475 basis points to 55.5% of sales due to increased sales volume, pricing, production efficiency and favorable currency impacts. Operating profits for BioDiscovery grew 41.9% to $57.9 million, while operating profits for CellCulture Systems declined 17.6% to $19.5 million. Luminex reported third quarter sales of $19.4 million (see page 12), an increase of 54.7%, but widened its adjusted operating loss to $2.8 million from $0.4 million. Revenue for the Technology segment grew 34%, including $5.2 million from systems sales, $5.7 million from consumables sales, $2.7 in royalties and $2.6 million in services and “other,” which improved 4.5%, 63.4%, 21.6 and 31.7%, respectively. Assay group sales amounted to $3.3 million, derived exclusively from the acquisition of Tm Biosciences. Year-to-date systems sales have increased 20%, for a total of over 4,700 systems, including more than 200 for the current quarter. QIAGEN NV’s third quarter revenues grew 49.5% to $176.6 million (see page 12) and adjusted operating profits improved 42.8% to $43.7 million. Organic growth increased 10%, 2% from price increases and 4% from both higher volume and new product introductions. Acquisitions contributed 35% to revenue growth and favorable exchange rates added 4.5%. Consumables revenue grew 50% to account for 89% of total sales, while instruments sales gained 44% to represent 9%. “Other” revenue also improved 99% to make up 2% of sales. Sales to North America, Europe and Asia climbed 70%, 23% and 29% to make up 52%, 37% and 9% of total sales, respectively, at constant exchange rates. Given the strong performance in the third quarter and introduction of new products, including HPV testing, the company increased its full-year 2007 EPS guidance by $0.03 to $0.61–$0.62 and reiterated its revenue guidance of $614–$635 million. QIAGEN expects fourth quarter organic growth of 10%. Strategic Diagnostics’ third quarter revenue declined 0.9% to $6.6 million (see page 12). Antibody revenue improved 15% to $3.6 million to account for 55% of total revenues, while food safety revenue declined 17% to $1.7 million to make up 25% of sales. The decline in Food Safety products was due to a 49% drop in Ag-GMO products, but was partially offset by a 24% increase in food pathogen sales. Water and Environmental products revenue lost 12% to $1.3 million to account for the remaining 20% of sales. Adjusted operating profits fell 39.1% to $0.3 million on account of increased R&D and SG&A expenses, while gross margins improved 420 basis points to 59.4% of sales due to higher-margin antibody and food pathogen sales.

< | >